N.C. regulators seek delay on Duke Energy accord after coal ash spill

RALEIGH, N.C. — State regulators in North Carolina have asked a judge to delay what environmentalists claim is a sweetheart deal with Duke Energy designed to protect the nation's largest electrical utility from heavy fines for allowing coal ash into the state's rivers.

The move came a week after a massive spill dumped up to 82,000 tons of toxic coal ash into the Dan River from a Duke Energy containment basin at a shuttered coal-fired plant in Eden, N.C. Duke and state regulators have downplayed the severity of the spill.

Environmental groups, which say Duke dumped illegal levels of arsenic, lead and other toxic heavy metals into the river, criticized the state request as a way to buy time for Duke until the Dan River crisis fades.

The state Department of Environment and Natural Resources on Monday sought to put off a proposed consent decree with Duke that would not require it to clean up coal ash polluting waterways at Duke plants.

Environmental groups say the stateproposed the agreement last summer to block their proposed federal lawsuits, which would have exposed Duke to potential heavy fines and cleanup requirements under the Clean Water Act.

Environmentalists as well as state regulators agree that Duke has been polluting the state's waterways for years by allowing coal ash to seep from its 14 coal-fired plants, including the Dan River facility. But they disagree over how to hold Duke accountable.

John Skvarla, secretary at the Department of Environment and Natural Resources, said the agency had asked for a delay on the Duke agreement "in light of the recent event" at the Dan River plant. "This experience may cause us to reevaluate the proposed consent order," he said.

"We were already addressing coal ash ponds through our multiple lawsuits against Duke Energy, and we will continue on that course once we have an updated assessment of the situation statewide," he said.

Skvarla also said the department had created a task force to review all coal ash basins in the state "to prevent any further unpermitted release of coal ash or ash pond water."

Under the consent decree, Duke, a $50-billion company, would pay $99,000 in fines. But if successfully sued under the Clean Water Act, it would face potential fines of up to $37,500 a day, according to lawyers for environmental groups.

Regulators "hope to put this case on the back burner until the public furor dies down, and then come back later with another 'trust us' no-settlement settlement," said Frank Holleman, senior attorney with the Southern Environmental Law Center. The group says its attempt to file a federal suit against Duke last summer was blocked by the state settlement.

"To date, they have done everything possible to protect Duke," Holleman said of state regulators. "It's a sad commentary on the agency that is supposed to be protecting the public."

Drew Elliot, a spokesman for the state agency, said a federal magistrate judge had ruled that the agency was enforcing clean-water laws. He said Skvarla was the first department secretary to sue over coal ash basins, and was joined in four such suits by environmental groups.

Elliot acknowledged a change under Skvarla of the agency's "customer service attitude," but said the department's "primary mission remains to protect the environment."

Lisa Hoffmann, a Duke spokeswoman, said the company had been working on ways to safely shut down its coal ash basins, including the Dan River facility.

"We are eager to complete the work outlined in the proposed consent order and recognize the state would like to reevaluate it," Hoffmann said.

After assuring residents that treated Dan River water was safe to drink, regulators a week later issued a public advisory to stay away from the river.

Republicans took over the state Legislature in 2010 and the governor's office in 2012, vowing to soften or repeal environmental regulations and promote industry. Skvarla, a Raleigh businessman, has said the agency is a "partner" to those it regulates, whom he considers "customers."

In a letter to a Raleigh newspaper in December, Skvarla wrote: "People in the private sector pour their hearts and souls into their work; instead of crushing their dreams, they now have a state government that treats them as partners."

In a video message to agency employees in July, Tom Reeder, director of the state Division of Water Resources, said the agency's primary job was not necessarily to implement safe drinking-water standards.

"Your job is not to bring down a huge compliance and enforcement penalty" on someone who violates environmental rules, Reeder said. "Your job is to help him get back into compliance."

Reeder said the agency had a "moral obligation" to review environmental regulations and "relieve the regulated community of that burden."

North Carolina Gov. Pat McCrory, who worked for Duke Energy for 28 years, has declined to say whether the state intends to fine or sanction Duke. State regulators have also sidestepped the issue, saying they are focusing on the spill.

Duke Energy donated at least $1.1 million to McCrory and his supporters during his 2012 campaign, according to campaign finance reports cited by the Associated Press. The utility has also donated millions to Democrats.

Both Duke Energy and the state say their tests show that levels of heavy metals are within state safety standards. The state said Sunday that arsenic levels had dropped to within safe standards since samples taken Feb. 3 — a day after the spill was reported — showed levels higher than allowed by law. Reeder said a state report that the early arsenic levels were safe was "an honest mistake."

Holleman said state regulators did not tell his group about Monday's request to delay the settlement, even though the environmental center is a party to the state lawsuits.

"We're the citizens who reported the crime," Holleman said. "They are the law enforcement agency, yet they work out a deal with the lawbreaker. Meanwhile, the Dan River is running full of coal ash."

Municipal water authorities in Danville, Va., the downstream city closest to the spill, have said that normal filtering procedures have made water drawn from the Dan River safe to drink.

Waterkeeper Alliance, an environmental group, has used kayaks to take water samples at the spill site; state regulators and Duke have taken samples at least two miles downriver, where the coal ash is diluted as heavy metals sink into sediment at the river bottom.

Waterkeeper and another environmental group, Appalachian Voices, said they found levels of arsenic, lead, chromium and other heavy metals far above state and federal safety standards that would leave the river polluted for years to come.

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